Baht hits four-week low against dollar, likely to weaken further: analyst
The baht weakened to a four-week low of 35.45 per US dollar at the start of trade on Wednesday.
The baht weakened to a four-week low of 35.45 per US dollar at the start of trade on Wednesday.
The baht’s dip came as the dollar strengthened following an increase in the US 10-year bond yield and the Fed signalling it would not rush to lower interest rates, said Krung Thai Bank's foreign currency analyst, Poon Panitpiboon.
The news also pushed down the gold price, triggering more buyers, which added to pressure on the baht.
The baht's weakening was mitigated by pressure to sell dollars, the analyst said. However, he advised keeping a close watch on whether the Thai currency weakens beyond its resistance level of 35.50 per dollar. This would open the way for a weakening to the zone of 35.80 baht per dollar, Poon said.
Market concerns have eased over the Bank of Thailand’s interest rate reduction but the baht is fluctuating more strongly than expected due to external factors, he added. These include the direction of the dollar, US bond yield, and gold. Poon advised that pending US economic data reports may change market players’ views on the Fed interest rate trend.
More Fed signals that it will not lower interest rates quickly and deeply may support the dollar and upward US 10-year bond yield adjustment, pressuring the baht and gold prices.
